Russia Could Help OPEC Prop Up Oil Price

Russia Could Help OPEC Prop Up Oil PriceRussia Could Help OPEC Prop Up Oil Price

Russia may help OPEC to prop up global oil prices by slightly cutting exports in favor of domestic refining, its ex-energy minister and a former negotiator with OPEC, Igor Yusufov, told Reuters.

Russia, which is pumping an average 10.5 million barrels per day, is not an OPEC member. Its production has peaked in recent years after steep rises in early 2000s.

"We have stable volumes - the question is whether we will increase production... I do not rule out that if we for example slightly cut exports it won't be something terrible. It is a question for each particular company which let's say may refine more in Russia and sell on the domestic market," he said.

Moscow needs oil prices of $100 a barrel and above to balance its budget. Its finances have been severely hit by Western sanctions over the Russian role in the Ukraine crisis.

Unlike its closest peer Saudi Arabia, leading OPEC player, Moscow says it cannot easily cut oil output due to severe weather conditions and a lack of storages. It may increase domestic refining or postpone bringing new fields on stream, says Yusufov.

Russia is gradually cutting crude supplies to the global market as it is increasing domestic refining capacity. Russian oil exports are seen down by a total 12 million tons between 2013 and 2015.

In November, Russia sent a delegation led by its energy minister Alexander Novak and Rosneft's CEO Igor Sechin to Vienna ahead of an OPEC meeting. No agreement was reached and OPEC kept its output targets unchanged, triggering a further sell off in oil prices which are now down almost a half to $60 per barrel from this year's peaks in June.

Yusufov said he did not expect prices to fall further, staying in the range of $60-80 per barrel in 2015.